Kenya:UK Company to Survey Sh161 Billion Kakamega Gold

Acacia Mining&comma; a British company that has been exploring for gold in Kakamega&comma; says it has started a survey to establish commercial viability of the deposits estimated at 1&period;1 million ounces of the precious metal&period;

The announcement is a signal that the multinational could soon join Goldplat which mines the commodity in Migori&period;

"The updated inferred resource estimate completed for the year-end returned &period;&period;&period; 1&period;044 million ounces at Isulu and for Bushiangala 126&comma;600 ounces&comma;" Acacia said of its Kakamega sites in a trading update&period;

"A technical study to determine mineability of these deposits was commenced in Q4 2017&period;"

At a total of 1&period;1 million ounces&comma; the recoverable deposits are worth an estimated Sh160&period;8 billion based on the price of Sh137&comma;430 per ounce on Friday&period;

The study comes after Acacia intensified exploration activities in western Kenya&comma; which cost it &dollar;12&period;2 million &lpar;Sh1&period;2 billion&rpar; in the year ended December&comma; up from &dollar;10&period;5 million &lpar;Sh1 billion&rpar; a year earlier&period;

The recent rally in gold prices is expected to encourage production around the world&period; The current price of about &dollar;1&comma;360 per ounce&comma; a 20-month high&comma; represents a gain of 20 per cent from lows of &dollar;1&comma;133 in December 2016&period;

Increased gold production will diversify the country's exports&comma; help to fund government expenditure and shore up the local currency from dollar receipts&period;

Acacia&comma; for instance&comma; paid &dollar;143 million &lpar;Sh14&period;4 billion&rpar; in royalties and taxes to the Tanzania government where it has some of its largest operations&period;

Gold exports from Kenya have&comma; however&comma; been sluggish so far&period; Goldplat's local subsidiary Kilimapesa Gold&comma; for instance&comma; sold about Sh374 million worth of the precious metal in the six months ended December -- boosted by increased production at its Migori plant&period;

Kilimapesa's output rose 2&period;2 times to 2&comma;681 ounces in the period compared to 1&comma;190 ounces a year earlier&comma; the multinational disclosed in regulatory filings&period;

The company's gold sales rose 2&period;4 times to 2&comma;720 ounces from 1&comma;093 ounces&comma; placing the value of the commodity sold in the review period at Sh374 million&period;

The royalty rate the company pays to the Kenyan government was not immediately clear but miners of other commodities are paying royalties in the low single digits&period;